3. The following information relates to Davidson, Inc. for January. A. The balan

Question

3. The following information relates to Davidson, Inc. for January.

A. The balance on the bank statement for January 31 is $4,917.18.

B. The cash balance recorded in Davidson’s books is $5,085.92.

C. Cash receipts for January 31 of $1,230.50 were deposited after 5:00 p.m. and

were not listed on the bank statement.

D. The following checks were outstanding on January 31: check number 427 for$45.00, check number 436 for $446.28, and check number 437 for $654.40.

E. A memo included in the bank statement for $80.00 is for a customer’s check that

was returned for non-sufficient funds.

F. Interest earned during January was $4.16.

G. A check that was incorrectly recorded in Davidson’s check register for $10.10

cleared the bank for $18.18.

Required: Prepare a two-column bank reconciliation for January.

Explanation / Answer

solution :

Adjustment Balance as per books 5085.92 Cash receipts for January 31 not listed on the bank statement -1230.5 Outstanding checks on January 31 1145.68 customer’s check returned -80 interest credited 4.16 incorrectly recorded check (10.1-18.18) -8.08 Total -168.74 Balance as per bank statement 4917.18

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